Towards a slow and painful recovery.

Those desperate for some positive news on the economic front in the United States have something to cheer about. For the first time in nearly fifteen months, the U.S. unemployment rate fell by a smart margin, indicating a slow and painful movement towards recovery. Provided, of course, the relative data as presented in surveys carried out by Bloomberg and others is accurate and reliable.

One of the most important aspects of the current crisis is the issue of credibility of the institutions that were considered above reproach, and totally reliable. As it transpired later, many of these institutions were found sorely wanting in competence, as well as integrity.

The optimism about the current situation is mainly on account of the fact that job losses that were supposedly estimated to be in the region of approximately 325,000, turned out to be only around 247,000. It is not clear if the estimates were accurate or there is a real improvement in the ground level situation.

Some of the areas where job losses occurred in good numbers are the financial services, the construction sector, and the hospitality industry, while the auto industry added several thousand jobs in the otherwise cloudy scenario.

It remains to be seen, however, as to when and at what rate consumer spending would improve. That would be a key indicator of consumer confidence, as well as availability of disposable incomes. The economic recovery chain does not appear to be consistently strong throughout. There are weak points that could easily pull the positives back to square one.

If the American economy is really on the mend, it is definitely not at a pace that many fondly look forward to.

Contradictory signals of American economic recovery.

Is the U.S. economy on the mend? Are things looking up? Is the worst over for the American economy? If one were to go by the media reports of increased public confidence in the U.S. businesses, a reported surge in the U.S. home sales, as reported by Bloomberg, and such other reports, then it would appear that the dark clouds of recession are giving way to an emerging blue sky.

However, reports emanating from Associated Press that the U.S. Postal authorities are seriously considering the shutting down of hundreds of post offices across the country, in view of the financial distress occasioned by the falling demand for postal services, and the increasing cost of running them.

The primary blame for the predicament of the post office system is put on the Internet which has steadily weaned away consumers from using postal services, by offering a cheaper and faster way of communication via the email. Never mind the adverse affects on the users’ writing skills, the email still scores over its traditional counterpart, because of its sheer convenience. Another factor that has reportedly hit the postal services hard is the fall in the advertisement revenues.

The Government Accountability Office is seized of the matter, and has already targeted the postal services as being a ‘troubled agency’, that would necessitate major structural changes in the way it does business. All aspects of its functioning would be put under the scanner like the delivery schedules, employee remuneration, etc.

It is not known how many jobs would be eventually lost in the above exercise. One thing is for certain. American communities across the length and breadth of the country will soon wake up to a new look postal service, that has served them faithfully for well over two centuries.

Challenging times for American Economy

Is the worst over for America?   Economically speaking, that is.  Is the U.S. economy on the mend?   Are better times around the corner?   Can the beleaguered citizens of the capitalist citadel breathe easier?   What would the Americans not give to get a “yes” for all of these questions!

Economists, Corporate leaders, experts and specialists of various hues are cautiously optimistic of the prospects of the economy coming out of the southern doldrums and heading towards northern pastures.   However, they do not want to be seen making the same mistakes again by making outlandish claims of economic well-being, in the face of continuing tough times, as they did about the supposedly unstoppable race of the economy towards the ninth heaven.

Some of the reasons advanced for the optimism about the U.S. economy, among other things, are said to be the slow but steady improvement in consumer sentiment, the slower pace, as well as smaller quantum of job losses, an improvement in the manufacturing environment, etc.   That apart, it is expected that consumer demand would pick up slowly in the next few weeks.   Just like a drowning man clutches at straws, the experts are clutching at any little bit of positive news to butress their claims of economic upturn.

Does all of this add up to an upturn in the economic conditions?   No one in his right mind would dare take a definitive stand on this.   Such is the effect of the sudden and unexpected downturn that took most by surprise.   The experts and specialists do not wish to be caught again with their tongues out!

From the statistics available, it would appear that American consumers are more positive of their economic future, and appear to be opening their wallets and purses a bit wider than before.   And the number of Americans queueing up for the dole seems to be slowing down a bit.  

It remains to be seen if the massive sums of money invested by the Obama administration to shore up the financial and other sectors of the American capitalist kingdom, would have the desired effect.   For the moment, everyone seems to keep his fingers crossed and praying for a better morrow.

I’m American working in Kuwait and the U.S embassy told all banks that American are not allowed to invest here